Is it worth changing your car to get cheaper car insurance?

Posted on 19. Aug, 2010 by in General, Guest Posts, Saving Money & Finances

Cars insurance, is it worth changing your carWe all know that the type, make and model of car that you have can affect car insurance and depending on your situation when you purchased your car you may or may not have taken this into consideration.

Car Insurance is often a very significant amount of the cost of a owning a vehicle and I am sure you have looked around and have been getting various quotes from various companies each and every year to find the best value possible for your vehicle and the coverage you need. But what about actually changing your vehicle to get a lower rate of insurance and better value for money?

Are the costs of a new vehicle worth the savings in insurance?

Obviously this really depends on a lot of factors but you may well be able to justify changing vehicle if say the savings you make outweigh the cost of change over a 1 or 2 year period. It only takes a little while to work out and if you get a decent vehicle that will last you quite a few years the savings really could add up.

The first step is to write down how much insurance per year you are paying for your car. This may also be a good opportunity to search around again and get new quotes to find the best deal for your calculations.

The next step is to get an idea of what you can actually sell your current car for. I would look around in magazines, local classifieds and consult some online car valuations such as this one from WhatCar. It may also pay to ask local dealers what they would pay for the car and also what value they may give you on a trade in. Once you have a good idea of this figure, write that down too.

Now you need to look around and see what other cars you would drive. Consider cars that are less appealing to thieves (no Porsche 911′s or Ferrari), cars that hold decent value, have good safety records and smaller engine sizes. Another main factor is they have to be able to be purchased for around the same price or only a small amount more than your current car.

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So now you have 3 simple figures. The cost of current insurance, the price you can get for your car and how much you need to buy your potential new cars.

With the potential car list you can now check out auto insurance quotes for each vehicle type. You may be surprised by the significant savings from just switching your vehicle!

I would love to know what you think about this idea and if you have ever switched vehicle to find that it actually saved you money on your insurance.

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8 Responses to “Is it worth changing your car to get cheaper car insurance?”

  1. Kevin@InvestItWisely

    19. Aug, 2010

    When I was younger, I was getting reamed in car insurance. My premiums for the year would be nearly as much as the car payments, if not more!

    It can pay off to save the money you would have spent while young, and get a nicer car when you’re older and the insurance won’t cost as much. You’ll have benefited from the compounding of your savings, as well.

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    • Forest

      22. Aug, 2010

      Yes it’s especially important whilst you are younger. Sadly that young early 20′s age is often when you want the most expensive cars to insure!!

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  2. Lop at Rebates Money

    21. Aug, 2010

    It all depends how much you can afford really. If you want to save money, buy a car that’s worth less than $10K and just go with liability. This way, you are paying pretty much the same rate.

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    • Forest

      22. Aug, 2010

      Thanks Lop, yes buying a cheaper car is often a better option.

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  3. Financial Samurai

    21. Aug, 2010

    I think I pay like $80/month or something, which isn’t much, but considering my car is worth MAYBE $5,000.. that’s 20% of the car value every year.

    I’d love to just be able to walk and bike.

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    • Forest

      22. Aug, 2010

      $80 a month isn’t too bad but like you say still a large chunk of your cars value…. A bike and my feet would be a dream. I don’t own a car but I do have to make use of public transport. It’s pretty cheap here though, not like the ridiculous prices back in London!!!

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  4. chris

    08. Apr, 2011

    There are some very good tips in this article. People forget that while they might be able to afford a really expensive sports car they also have to pay for the car insurance to go along with it. If you aren’t prepared that can really hit your wallet hard

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